Labor's Edge: Views from the California Labor Movement

On the last day of the 2015-2016 California Legislative session, the State Legislature sent the most substantial health bill of the year to Governor Jerry Brown. Passage of AB 72 (Bonta, Bonilla, Dahle, Gonzalez, Maienschein, Santiago, Wood)brings California only a signature away from ending decades of debate on the issue of billing patients for out-of-network services. Legislators from both sides of the aisle spoke in support of AB 72, many of whom did not support a previous version of the bill. The near unanimous 79-0 final vote in the State Assembly highlights the successful work of the stakeholder process. If the Governor signs AB 72, patients who follow the rules of their plan and go to in-network hospitals would be protected from surprise bills and only be responsible for in-network cost sharing for all the care they receive.

California law already protects most consumers from surprise billing emergency services, and AB 72 will create the same safeguards for non-emergency situations. This landmark legislation is the most significant step any state has taken to protect non-emergency patients who end up in the crossfire of billing disputes between insurers and providers. The bill guarantees that no person who follows the rules of their health plan and goes to an in-network hospital or facility will be hit with an unexpected bill of hundreds or thousands of dollars from a provider they didn’t choose and may have never even have met.

AB 72 is also the farthest any legislation has ever gotten to solve this problem. The bill breaks the logjam from AB 533, which was headed to the Governor’s desk, but stalled by just three votes on the final night of the 2015 session. After months of negotiations among lawmakers, advocates, and insurers, the revised legislation provides strong consumer protections while also paying doctors fairly. AB 72 includes safeguards against consumers having their credit adversely affected, wages garnished, or liens placed on their primary residence because of these surprise bills. At the same time, the legislation assures non-contracting doctors at least a minimum payment of 125% of Medicare or the average contracted rate, rather than 100% of Medicare as proposed in AB 533.

After AB 533 stalled last year, individuals throughout the state shared their stories of getting these unfair bills with their legislators. This consumer advocacy helped make the difference, even against well-heeled interests.

Surprise out-of-network bills have been a big problem for California consumers for decades. The data shows that almost 1-in-4 Californians have received a bill for which the insurer paid less than expected (23%); of those, nearly 1-in-5 were charged at an out-of-network rate when they thought the provider was in-network (18%); and most Californians (63%) assume doctors at an in-network hospital are also in-network (2015 Consumer Reports National Research Center).

These unexpected medical bills are a shock to family finances at an already stressful time. This long-standing injustice in our health system is even more intolerable as these bills could financially destabilize many of the lower-income families who are newly insured under the ACA. This issue has been unresolved in the state legislator since Jerry Brown was first Governor. He now has the opportunity to right a decades-long wrong.California health consumers can’t wait any longer for this important protection.